USD/JPY inches higher to 153.22, buoyed by inflation reports and a strengthening DXY. Despite US PPI data pointing to a deceleration in inflation, the bullish sentiment for the US Dollar remains unaffected. Federal Reserve officials voice concern over subdued inflation trends, underscoring persistent economic obstacles.
During the North American session, the USD/JPY continued its ascent and remains above the 153.00 level, even in the face of Japanese authorities’ verbal intervention against excessive movements in the Japanese Yen (JPY). Additional data from the United States (US) suggests that inflation is more persistent than anticipated, adding pressure on the Federal Reserve. As of the current writing, the pair is trading at 153.22, up 0.05%.
Despite Japanese interventions warnings, USD/JPY edges higher as stickier US inflation data fuels USD strength
The Greenback is gaining strength across various currencies, with the US Dollar Index (DXY) reaching its highest level since November 2023, currently at 105.51, inching closer to testing the next resistance level at 106.06. Wednesday’s inflation report largely influenced the dollar’s upward movement. Despite softer-than-expected data in the recently released Producer Price Index (PPI), particularly compared to the Consumer Price Index (CPI), the US Dollar remained resilient.
According to the US Department of Labor, March’s PPI slowed more than forecasted, registering a 0.2% month-on-month increase, below the estimated 0.3%. On an annual basis, the PPI rose by 2.1%, surpassing February’s 1.6%, while the core PPI stood at 2.4%, also exceeding expectations and the previous month’s data.
With US economic indicators signaling that the Federal Reserve’s work is not complete, further strength in the US Dollar is anticipated in the near term. Additionally, Wednesday saw US Treasury yields surge more than 20 basis points across the yield curve, enhancing the attractiveness of the American currency.
Meanwhile, Federal Reserve officials continued to make statements. New York Fed President John Williams expressed disappointment with recent inflation figures and highlighted the uncertain economic outlook. Richmond Fed’s Thomas Barkin noted that the latest inflation data doesn’t increase confidence in the economy’s disinflationary trend, raising concerns about a potential shift in the Fed’s stance.
On the Japanese side, Finance Minister Suzuki stated that authorities are prepared to take necessary measures to address excessive volatility in the Yen, emphasizing a sense of urgency in monitoring the situation.
USD/JPY Price Analysis: Technical outlook
With the USD/JPY surpassing the 153.00 mark, the next resistance levels to watch out for are significant historical milestones. These include the June 1990 monthly high at 155.78, followed by the April 1990 pivot high at 160.32. However, the potential for intervention poses a risk that could push the pair towards key support levels. These support levels include the Tenkan-Sen at 152.05, followed by the Senkou Span A at 150.97, the Kijun-Sen at 149.89, and closely thereafter, the Senkou Span B at 149.59.
USD/JPY
